I have only just started using it, but it looks very promising. From what I understand so far: you activate tasks and from then on Mylar remembers what files you touched while working on that task. This enables you to quickly filter for files relevant to the task. With Java it even works on Source Code basis (what methods are relevant to the task) - planned for other languages besides Java, too. When submitting to subversion, you can also bundle all the filters for a task. Mylar also records the time you spent on the activated task.
It looks very impressive, but for me a bit scary. They use some of the exact same concepts we are using for our startup for business in general: Focus on the context around exactly what your are doing. What I didn't notice was whether or not they had built in a system to automatically prioritize tasks for the user based on creating customer value. Without that, it will get overwhelming with a growing number of tasks like any generic task management system does.
Pretty neat, I think.